After a memo from the Houston controller declaring that the proposed 2018 tax rate could not be verified, Mayor Sylvester Turner responded saying that there is no need for verification and he was moving forward on his rate request.
On Monday morning, city controller Chris Brown sent a memo to Turner’s administration and city council alerting them that the administration’s proposed 2018 tax rate could not be verified because it exceeded the voter-imposed revenue cap.
With Houston being declared a disaster zone in the aftermath of Hurricane Harvey, the city is allowed to exceed the property tax cap by increasing the rate — this year only — to take in more revenue for emergency expenditures, however local law requires council approval to utilize that exception.
The mayor is arguing that by passively increasing tax revenue, meaning maintaining the same tax rate while collecting more from the same tax base, he can exceed the cap without invoking its disaster exception as long as the additional revenue is directly correlated with emergency expenditures, according to the city charter.
Less than 48 hours before city council is set to vote on adoption of the tax rate, many members, and none of the public, even knew what the proposed rate was. The rate has only become public through the Controller’s memo.
In a response to Brown late Monday evening, Turner’s interim Finance Director Tantri Emo, sent a memo him and city council saying that the charter “does not provide for Controller’s Office verification,” and included a section of the charter that says that the city’s revenue limitations don’t apply to additional revenues collected because of expenditures incurred by a declared federal or state emergency or disaster.
Simply put, the Turner administration is saying they don’t need approval from the controller and that the charter allows them to collect revenue above the cap as long as it is directly related to an emergency expenditure.
Though this move will allow Turner to say he didn’t raise taxes, that’s extremely disingenuous. With his staunch opposition to reappraising property post-Harvey, he is effectively raising taxes as rising property values mean the city will collect more revenue from the same base in 2018 than it did in 2017.
The council item was dated October 3rd, but only brought to council on the October 18th agenda. Because of the statutory deadline for approving a property tax rate, this means that council members, given only two-day’s notice, don’t have the ability to “tag” it and delay the vote for another week to get more information.
Even worse is that the mayor’s agenda item for the tax rate didn’t make the rate public information until Monday, as well. So taxpayers who wanted to address council on the issue only had 24 hours and one council session to do so.